Stress Busters for Your Project Team

Satisfying clients, making a profit, hitting deadlines, meeting professional standards, and avoiding liability actions all create stress on A/E/C project teams. Additionally, your team members are also juggling family obligations, fun, hellish commutes, and other personal commitments on top of their work responsibilities. Project managers that master these normal stress inducers report lower turnover, higher productivity and profits, and increased work satisfaction among their team members.


How can you lower your team members’ stress? Encourage your team to try the following four approaches:

1. Set specific, short-term objectives: Young, eager professionals frequently set high, long-range goals for themselves. During interviews and annual reviews, help them think more realistically. Show them they can realize their lofty ideals by scheduling bite-sized objectives. As they complete each one, they will have moved that much closer to the goal. Encourage them to keep a task list and tracking log of their completed actions.

2. Break down assignments into smaller parts: The suggestion above also goes for specific task assignments. Your team members will feel more successful if they break their tasks into manageable subtasks. Completing one or more of these each day gets the momentum up and the project out. We’re all familiar with writing outlines – just do the same thing with your task list.

3. Experiment with time-management techniques: Teach your team to identify the important things and tackle them first. Show them different time management alternatives. Your goal is to help them make their time productive. Help them avoid procrastination; putting off tasks produces even more tension than taking care of them immediately.

4. Learn to say NO: In an effort to prove themselves, many eager professionals take on far too much work with unrealistic deadlines. By learning to periodically say “no” to supervisors and clients, your team members place more reasonable demands upon themselves, and also train those to whom they report, that they won’t willy-nilly accept every request tossed their way.


Set up a support system for your design professionals that can observe and assist then when they’re overwhelmed. Talk this over with your Human Resource Director, if you have one. Assign a mentor to advise each person on your team. Encourage open communication and mutual support among your whole professional staff. Don’t let them perceive their peers as merely competitors for advancement. Another suggestion is to hold a forum to discover what in your office and on your project produces stress. Listen openly to everyone’s thoughts.

Many A/E/C firms work under a “feast or famine” mentality, where there is either too much work or not enough. As much as possible, plan project workload to reduce the stress inherent in your work environment.

When In Doubt, Fire Promptly!

Feeling the need to supervise someone closely is a strong sign that you may have made a hiring mistake. Deal with it promptly and fairly as a matter of personal accountability to your team. Top professionals like to work with their equals and resent managers who tolerate mediocre hires.

The warning signs of a hiring mistake are familiar:

• The employee is not in demand by project managers other than his immediate supervisor.

• He takes direction/guidance poorly from colleagues.

• He does not learn from mistakes.

• The employee is very punctual arriving to and departing from work.

• He shows little curiosity, asking few questions off topic from assigned tasks.

• He follows directions blindly, without understanding the expected result.


The purpose of probationary periods and performance reviews is to allow new employees to prove their worth. Do not squander these valuable quality control steps.

• Think hard, focusing on the real issues. What important information may have been overlooked? Is this the wrong person or are they merely in the wrong position. Were expectations clear? Without standards, quality control is impossible and creating standards after the fact is patently unfair.

• Design a pragmatic coaching program including multiple participants with independent perspectives. Get input from Human Resources on realistic decision criteria and necessary documentation.

• Gather first-hand information, supplemented with input from the assessment team. Be consistent and persistent Careful listening and close inquiry when contemplating a termination takes far more time than coaching a solid performer.

• Avoid generating fear in the team. Be transparent. Openly explain what you are doing and why. Use the process to reinforce standards in a positive way.

• Make necessary decisions. Use data to inform your judgment with human resources as a quality assurance check. Keep the burden of proof on the employee. Explain your assessment and recruit allies. While the decision is yours, it must make sense to the team.


Termination is hard. Tell the truth, as you know it, with plain language and simple concepts. Acknowledge uncertainty when appropriate and expect denial. I recall a termination meeting during which an engineer expressed surprise because he had never received a performance review. When shown a series of unfavorable review forms that he and his supervisor had signed, the engineer said he did not believe they were official reviews. My response was compassionate, respectful, and honest.

Focus on your mission of building a highly motivated and productive team. After every termination or departure, revisit the hiring process for lessons learned, and improve the process accordingly.

Want to learn more about how to deal with tricky HR situations? Register for PSMJ’s upcoming A/E/C Industry Human Resources Summit. The HR Summit is a senior level HR event specifically designed to address the increasing needs and demands of senior leaders of HR, as well as other key executives who deal with the critical employee and firm issues on a daily basis. Through panel discussions and best practices presentations, you learn through examining successful real-life case studies, receive A/E/C survey results, while networking and asking your peers for their proven solutions to problems just like yours.

For more information, click here to download the program brochure or contact our Education Department at education@psmj.com or 617-965-0055.

Private Equity Expert William Lehr joins PSMJ’s M&A Consulting Team

It is no secret that ownership succession is a growing challenge for many architecture and engineering firms and this is one of the most significant drivers of elevated merger and acquisition activity in 2011 and going into 2012. “Transaction activity and new engagement inquiry levels for PSMJ are at record levels,” states PSMJ Senior M&A Consultant Brad Wilson. “From cross-border deals to growing opportunities for private equity, 2012 will be a busy year.”

Responding to growing global demand, PSMJ welcomes William Lehr to its world-class M&A consulting team. Bill joins PSMJ with more than a decade of private investment experience. Bill’s well-rounded career includes serving as a Vice President with Blue Point Capital Partners where he was closely involved with Blue Point’s investment in 600-person Callison Architecture.

“We are thrilled to have Bill on the team. Around the United States and around the world, we have taken great care in building the most respected and sought-after brand when it comes to the business of architecture and engineering,” states PSMJ President and CEO Frank Stasiowski, FAIA. “Our merger and acquisition practice has been an instrumental part of PSMJ’s growth strategy and getting Bill on the team is just one more example of our commitment to delivering excellence to our clients.”

As a consultant in PSMJ’s M&A practice, Lehr’s areas of focus will be in assisting both acquiring and selling clients in achieving M&A success. Additionally, he’ll be a key resource in PSMJ’s acclaimed Senior Executive Roundtable on Mergers & Acquisitions.

Infrastructure & Energy Projects Continue to Carry the Weight

PSMJ’s latest quarterly survey shows continued strength in regulated markets

Despite the prolonged lackluster plateau of some pockets of the A/E industry such as Education and Government, the end of 2011 provided some rebound in the Housing and Commercial sectors, and continued strength in the Healthcare and Power/Utilities markets. Information gleaned from the latest Quarterly Market Trends (QMT) report from PSMJ Resources, Inc., shows optimism amongst company leaders on par with survey data from 2006 and 2007.

Since 2003, PSMJ has surveyed A/E firm leaders on a quarterly basis regarding what they are seeing in the marketplace. The survey queries respondents on conditions in a variety of markets and submarkets as well as overall health of revenue, backlog, and proposal activity. The 2011 fourth quarter survey shows growing optimism on what the near-term future holds. Nearly half (49%) of respondents expect revenues in the first quarter of 2012 to be up over the previous quarter. PSMJ observes this trend to be consistent with the general year-end cyclical characteristics of the industry.

A notable trend, based on proposal activity, is that markets where capital spending is driven by regulation, such as Environmental, has remained strong over the last five years. “We don’t anticipate a rebound in state or local spending until 2014,” says Gregory Hart, a PSMJ consultant. “But opportunities are ripe for A/E organizations to be aggressive in pursuing infrastructure work.” Projects in Water/Wastewater, Utility Distribution, Renewable Energy, and Transportation still abound.

To learn more about PSMJ’s QMT or to participate in the next survey, call 800.537.PSMJ. Subscribers to PSMJ’s monthly newsletter receive the full QMT report in their mailbox each quarter. This report includes our take on the latest movements as well as data broken out into key market and geographic segments. To keep your finger on the pulse of recovery in the A/E space, visit www.psmj.com and become a member of PSMJ today!

The All-Important PMP

Whether you’re managing one small project or multiple large projects, you want to serve your client(s) with efficiency and proof of solid, consistent performance. The best way to set this up is to develop a Project Management Plan (PMP).

A PMP is essentially the work plan for a project, without all of the contractual legalese. It’s a living document, as a project moves forward, describing the how, who, and when for each step. If managing multiple projects for a single client, identify all aspects that are common to that client, then define how they should be tackled. As an example, consider invoices: your Project Management Plan should describe what needs to be included on each invoice, and there should be a sample format. This simple instruction can save a huge amount of wasted effort, aggravation, and client dissatisfaction. Other elements of a Project Management Plan include:

• Goals & objectives

• Project approach (general scope and accountability)

• Team organization & responsibilities

• Risk management

• Quality control / quality assurance process

• Master/task order contract

• Change management process

• Communication plan


Thoughtfully creating a PMP you can stick with will provide the deep understanding and common ground you need to command your project’s direction and ultimate success.

Learn more practical PM advice with our new edition of the Ultimate Project Management Manual. Find out what hundreds of A/E/C firms already know! The Ultimate Project Management Manual can instantly and dramatically improve a Project Manager's ability to manage projects for quality, speed, and profitability. It adds weeks, months, even years of billable time!

Construction job openings, pay rose at yearend but hiring slipped; ISM reports growth

The seasonally adjusted number of job openings in the U.S. at the end of December, and the rate as a percent of openings plus employment during month, increased from November and from December 2010, the Bureau of Labor Statistics (BLS) reported on Wednesday. The job-opening rate in construction increased from 0.8% in December 2010 to 1.3% in both November and December 2011 but remained the lowest of 11 sectors or subsectors BLS reported and about half the overall rate. The hires rate (hires as a percent of total employment) was steady overall from December 2010 to November and December 2011 but decreased in construction. The rate of total separations (quits, involuntary layoffs and discharges, retirements and other) held steady in total but dropped in construction from more than the hires rate in December 2010 to slightly above in November 2011 and a little below in December 2011. The quits rate (workers who quit as a percent of total employment) held steady overall and was similar in construction to the overall rate, with little variation. One possible interpretation of the construction data is that firms are advertising more openings and are laying off fewer workers in anticipation of future work but are not ready to hire yet. Workers have not increased quits, as they might if other firms were hiring more.

Compensation (wages, salaries and benefits) in private industry rose 0.4% in the fourth quarter, seasonally adjusted, and 2.2% for all of 2011, BLS reported on January 31. Compensation in constructoin increased 0.5% for the quarter and 1.6% for the year, compared with a 1.0% increase in the 12 months through September 2011.Wages and salaries increased 1.6% for the year for the private sector and 1.2% for construction.

“Economic activity in the non-manufacturing sector grew in January for the 25th consecutive month, say the nation's purchasing and supply executives,” the Institute for Supply Management (ISM) reported on February 3.

Construction ranked third out of 10 sectors with growth in business activity from December to January; four sectors reported decreased activity. Construction was listed sixth out of 12 sectors with growth in new orders.

New orders from U.S. manufacturers (excluding semiconductor manufacturers) increased 1.1% from November to December, seasonally adjusted, and 12% for all of 2011, the Census Bureau reported on February 3. Orders for construction materials and supplies dropped 0.8% for the month but climbed 3.9% for the full year. Orders for construction machinery rose 2.2% and 38%, respectively.

“In the U.S. last year, developers broke ground on office buildings with a total of just 56 million square feet of space, the lowest level tracked by McGraw-Hill Construction since at least 1960,” the Wall Street Journal reported on Monday…."However, office-building construction isn’t likely to bounce back until there is some combination of higher rents and property values, and less restrictive financing. Prices in most markets are still well below their 2007 peak, making the cost of new buildings too expensive to justify in the face of cheap existing buildings. There are a few markets where property values have come back quickly. Both New York and the San Francisco area, where a technology boom has pushed rents up rapidly, are seeing a few speculative office buildings break ground. But generally, banks remain conservative in their lending.”

According to a quarterly survey released by the Federal Reserve on January 30 of senior loan officers at 56 domestic banks and 23 U.S. branches and agencies of foreign banks, the “domestic banks reported that their lending standards had changed little and that they had experienced somewhat stronger loan demand, on net, over the past three months. Foreign respondents, which mainly lend to businesses, reported a net tightening of their lending standards while loan demand was about unchanged….Domestic banks continued to report little change in their standards for [commercial real estate (CRE)] loans, but modest net fractions had eased some loan terms over the past year. Moderate net fractions of domestic banks reported that demand for CRE loans had strengthened in the fourth quarter. Modest net fractions of foreign respondents reported having tightened standards for CRE loans. Foreign respondents also reported, on balance, little change in demand for such loans.”

Private-sector employment and union membership increased at the same rate from 2010 to 2011, leaving membership at 6.9% of employment, BLS reported on January 27. Employment in construction rose from an average of 6,103,000 to 6,244,000, while union employment rose from 801,000 (13.1%) to 874,000 (14.0%). Median weekly earnings of full-time wage and salary workers in construction rose 1.5%, from an annual average of $735 in 2010 overall to $746 in 2011. For union members, earnings rose 0.8%, from $1,051 to $1,059. For nonunion workers, the rate rose 0.9%, from $692 to $698.

5 Keys for Multi-Project Success

Attempting to plan and manage projects in isolation is like using GPS to drive in traffic with your eyes closed.

• Plan thoughtfully, expecting change. Multi-project management requires each project to be consciously planned and executed to a much higher level than necessary to complete it in isolation. Planning is a tool that you and the team will use to deeply understand each project and its interactions with the rest of your operating environment. Change will happen; expect it and be ready. Even when a project’s scope does not change, outside factors such as staff availability, and regulatory reviews typically seldom follow your expectations.
  


• Never waste time with accounting. Set up a few standard reports that give you the information needed for regular high level multi-project overview and single project details on demand. Use a consistent work breakdown structure that is meaningful to you, the team, and client. Include budgets and deadline benchmarks for manageable size tasks (e.g. 4-6 week duration and 40 man hours). Let time sheets and financial services provide the information for you to lead efficiently.
  


• Choose resources wisely for flexibility. Select diverse project team members whose competing demands are unlikely to auto-correlate. Although, most team members should be familiar to you, consciously include a few new members. They will begin to expand your core team and become a reserve posse for those times when you need extra help. Promptly weed out people from your roster that are too weak, needy, or unreliable; and tirelessly cultivate the best and most promising ones.
  


• Be selective in the assignments you accept. Say yes only after careful consideration. Manage commitments to suit available resources. If you do not understand your work load, you cannot say yes. Make crisis perpetrators aware of the havoc they are inflicting on you and others. Insist that they help mitigate the impact. Recognize the cost of lost opportunities when chasing emergencies.
  


• Manage in real time. Convey the strategic intent for each assignment by providing more examples than explanations to your team. Follow up frequently, consistently, and rigorously. Listen carefully while insisting on completed staff work. Refuse upward and reverse delegation. Reward your team as they develop a can-do competent culture.

Thoughtful planning provides the deep understanding and common ground you need to command from when the situation gets out of control.

Learn more about how to effectively manage multiple projects by attending PSMJ's A/E/C Project Management Bootcamp. This Bootcamp is a revolutionary training like no other--through interactive case-studies, real-world examples, and proven solutions, you will foster innovation, elevate communications, increase productivity, and improve your firm's bottom line.

PSMJ is now accepting registrations for our Spring 2012 A/E/C Project Management Bootcamp series - instantly and dramatically improve your ability to manage projects for quality, speed, and profitability with PSMJ’s two-day intensive PM training seminar. Click here to order or contact PSMJ Education Department at education@psmj.com or (800) 537-7765.

Firm Billings Continue Rise in December

The American Institute Architects’ Architecture Billings Index increased for the second month in a row in December, marking the first two-month gain since February and March of 2011. Figures were strong enough to generate growth in most regions of the country and in most major construction sectors. Architecture firms in the Northeast, Midwest, and South all reported increases, along with firms specializing in residential, commercial/industrial, and institutional projects.

The Architecture Billings Index (ABI) serves as the leading economic indicator of construction activity, and reflects the approximate 9-12 month lag time between architecture billings, and actual construction spending. The monthly ABI scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline.

The ABI registered a score of 52.0 again in December, the same score as November, and a substantial increase from the 49.4 registered in October. While mixed-practice firms saw declines in December, it was for the most part a month of improvement for firms across the country. Real estate markets saw only modest activity in most regions, but commercial markets showed signs of ongoing improvement in several districts.

Economic growth strengthening

The national economy has been moving towards a modest upswing, and according to a report by the Federal Reserve Board, most of the 12 Federal Reserve districts report economic activity expanding at a moderate pace from late November through December. The general improvement in the economy was reflected in the December employment report - the national unemployment rate fell to 8.5%, the lowest reading since early 2009. Conversely, this number might overstate the underlying improvements in the employment situation, since in recent months the overall labor force has shrunk, lowering the unemployment rate. National payrolls increased by 1.3 million in 2011, and by over 400,000 in the fourth quarter. Construction payrolls increased in December, but were down very slightly for the entire year.

This general improvement in economic conditions is helping the consumer outlook. This past year ended with four straight monthly increases in consumer sentiment, according to the University of Michigan, and the preliminary January rate shows healthy growth over the December reading. Retail spending (even with some moderation in growth toward the end of the year) increased 7.7% in 2011 over 2010 levels, the strongest rate of increase since 1999.

While the ABI numbers point to continued growth in the months ahead, they seem eerily similar to the pattern established in late 2010. In that case, strong ABI numbers in the fourth quarter of 2010 were followed by modest gains in the first quarter of 2011 before diving downward again in the second quarter of the year. With any luck, this won’t be the case, and hopefully we will continue to see gains for the ABI in the months ahead.

Statistics

By region, the ABI breaks down as follows from November to December: Midwest is up 53.1 from 50.9, West is down 45.1 from 45.6, South is down 54.2 from 54.4, and Northeast is up 52.6 from 49.1,

By market sector: Residential is down 54.3 from 55.8, Commercial/Industrial is up 54.1 from 53.9, and Institutional is up 51.3 from 48.9.


This month, Work-on-the-Boards participants are saying:

• Commercial real estate transactions are up. Speculative commercial real estate construction is nonexistent. Developers with money are buying, (not developing) projects.
— 20-person firm in the Midwest, commercial/industrial specialization

• We are receiving more RFPs (and in particular, more requests for new projects) with our existing clients. Our outlook has improved considerably in the last four months.
— 30-person firm in the South, institutional specialization

• Services traditionally done by architects are being offered more and more by contactors.
— 2-person firm in the Northeast, commercial/industrial specialization

• The majority of our commercial clients have hoarded cash for the past several years, and are now self-financing. Banks play little role in the majority of our work; where they are involved there are significant delays and hurdles to overcome.
— 5-person firm in the West, mixed specialization

Recent Transaction Provides One More Example of Active M&A Market

PSMJ advises on I&S Group’s merger with Kuehl & Payer

2011 ended with more than 200 mergers and acquisitions announced in the A/E space. This is back up to pre-recession levels and the experts in PSMJ’s M&A consulting team expect 2012 to be another busy year. “With the growing wave of retiring Baby Boomers and the pressure that is putting on internal succession plans, we are expecting consolidation to be a major force shaping the A/E industry in 2012 and beyond.” states PSMJ Senior M&A Consultant Brad Wilson.

One of the most important points to note on the state of M&A activity in the A/E space is that, as economic conditions gradually improve, more and more strong and growing firms are seeing opportunities to align with like-minded partners. Such was the case in the recent merger between E/A firm I&S Group (Mankato, MN) and civil engineering firm Kuehl & Payer (Storm Lake, IA). The transaction creates a full-service architectural and engineering firm that will serve southern Minnesota and northwestern Iowa. PSMJ provided financial advisory services to both I&S Group and Kuehl & Payer to facilitate this transaction.

Kuehl & Payer was established in 1983, providing consulting services in civil engineering, environmental engineering and land surveying. The company employs over 40 at its Algona, Sac City and Storm Lake, IA locations.

With two offices in Mankato and Faribault, MN, and over 60 employees, I&S Group has been offering architecture, civil engineering, land surveying, environmental services, structural engineering, mechanical engineering, interior design, landscape architecture, electrical engineering and community resource planning since 1973.

"We are excited about the opportunity to merge the best qualities of both of these successful firms to both provide our existing clients with an even higher level of service and reach out to new clients with responsive, creative and cost-effective design services," said Chad Surprenant, President of I&S Group.

To keep tabs on the latest M&A news from the A/E industry and transactions like this one, subscribe to the M&A Insider — PSMJ’s free weekly e-news on the latest transactions and the tips you need for successful M&A strategy. Learn more by visiting http://www.psmj.com/.